Frito-Lay, Inc. v. INTERNATIONAL BRO. OF TEAM., ETC., C-74-1092-CBR.

• Decision Date: 15 September 1975
• Docket Number: No. C-74-1092-CBR.,C-74-1092-CBR.
• Citation: 401 F. Supp. 370
• Parties: FRITO-LAY, INC., a Delaware Corporation, Plaintiff, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, an unincorporated association, et al., Defendants.
• Court: U.S. District Court — Northern District of California

401 F. Supp. 370

FRITO-LAY, INC., a Delaware Corporation, Plaintiff, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, an unincorporated association, et al., Defendants.

No. C-74-1092-CBR.

United States District Court, N. D. California.

September 15, 1975.

Littler, Mendelson & Fastiff, San Francisco, Cal., Kilpatrick, Cody, Rogers, McClatchey & Regenstein, Atlanta, Ga., for plaintiff.

Brundage, Neyhart, Beeson & Tayer, San Francisco, Cal., for defendants.

MEMORANDUM OF OPINION

RENFREW, District Judge.

Plaintiff, Frito-Lay Inc., brought this civil action pursuant to Section 303(b) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 187(b), against fifteen local unions and two joint councils affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America seeking monetary relief for all damages suffered by plaintiff as a consequence of defendants' alleged illegal strike against plaintiffs in violation of Section 8(b)(4)(A) of the LMRA, 29 U.S. C. § 158(b)(4)(A), and Section 303(a) of the LMRA, 29 U.S.C. § 187(a). Defendants filed a motion to dismiss plaintiff's second amended complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure on the ground that it failed to state a claim upon which relief could be granted.¹ For the purposes of this motion to dismiss, the Court accepts as true the facts alleged in the complaint.

Plaintiff manufactures, sells, and distributes potato chips, corn chips, and other snack food products in Northern California. Defendants are labor organizations who represent route salesmen and warehousemen of plaintiff in Northern California and a small part of Nevada. Defendants also represent route salesmen and warehousemen of Laura Scudder's ("Scudder's"), a snack food division of Pet, Inc., and Granny Goose Foods, Inc. ("Goose"), both of which companies also manufacture, sell and distribute potato chips, corn chips, and other snack food products in California. Between 1960 and December 14, 1973, plaintiff, Scudder's, and Goose were members of an "employer organization" which was created and maintained for the purpose of bargaining for and entering into collective bargaining agreements with defendants. That employer organization negotiated five successive collective bargaining agreements with defendants on behalf of plaintiff, Scudder's, and Goose between March 1, 1960, and February 28, 1974. In a letter dated December 14, 1973, plaintiff notified defendants, Scudder's, and Goose that it was withdrawing from the employer organization and would thereafter bargain on its own behalf with defendants.² Similarly, on January 10, 1974, Goose notified plaintiff, Scudder's and defendants of its withdrawal from the employer organization. On January 28, 1974, a negotiating committee representing all of defendants submitted a contract proposal to plaintiff, Scudder's, and Goose which was contained in a single document applicable, without variation, to all three companies. Throughout the negotiations, defendants demanded that the three companies agree either to one contract covering employees of all three companies or to three separate uniform contracts containing identical provisions for each company. At no time did defendants offer proposals which were non-uniform for the three companies.

At various times defendants conditionally agreed to various proposals made by plaintiff, contingent upon the acceptance of such proposals by the other two companies. Defendants also insisted that plaintiff agree to contract provisions that were inapplicable to plaintiff's business operations, but applicable to the business operations of Goose and Scudder's. On four separate occasions between February and May of 1974, separate contract proposals of each company were submitted separately to all members of defendants. Each individual company's proposal was voted on by the employees of all three companies ("group voting"). On none of these occasions were employees allowed to vote alone on the proposal of their own company. Each company repeatedly demanded that its contract proposals be voted on for ratification by its employees only.

On May 12, 1974, defendants commenced a strike against all three companies. One object of that strike was to force or require the three companies to accept one contract covering employees of all three companies or to accept three separate uniform contracts containing identical provisions for each company. On June 3, 1974, the Western Conference of Teamsters ordered defendants to stop using the group voting procedure and allow each company's contract proposal to be voted upon by its own employees. Subsequently, defendants abandoned their insistence upon one contract covering all employees or three separate uniform contracts containing identical provisions. The strike remained in effect against plaintiff until June 29, 1974, when plaintiff's contract proposal was ratified by plaintiff's employees who were allowed to vote separately for ratification.

Section 303(b) of the LMRA provides that whoever shall be injured in his business or property by reason of any violation of Section 303(a) may sue in any district court and shall recover damages sustained and the costs of the suit. 29 U.S.C. § 187(b). Section 303 (a) provides that it shall be unlawful for the purposes of Section 303 only, in any industry or activity affecting commerce, for any labor organization to engage in any activity or conduct defined as an unfair labor practice in Section 8(b)(4). 29 U.S.C. § 187(a). Finally, Section 8(b)(4)(A) provides inter alia that it shall be an unfair labor practice for a labor organization or its agents to engage in, or to induce or encourage any individual employed by any person engaged in commerce or in an industry affecting commerce to engage in, a strike where an object thereof is to force or require any employer to join any employer organization.

Plaintiff contends that the above-described activity and conduct of defendants constituted an unfair labor practice within the meaning of Section 8(b)(4) (A) of the National Labor Relations Act, and hence violated Section 303(a), thus entitling it to damages pursuant to Section 303(b), 29 U.S.C. § 187(b). More specifically, plaintiff contends that Section 8(b) (4) (A) prohibits unions from forcing competing employers to bargain on a multi-employer basis and that the conduct of defendants violated that proscription. Defendants argue that violation of Section 8(b)(4) (A) requires that the coercive conduct of the union (in this case a strike) be directed at requiring plaintiff to obtain actual membership in an employer organization. Because the Court agrees with plaintiff's argument, it denies defendants' motion.

The first issue before the Court is whether Section 8(b)(4)(A) prohibits only strikes whose object is to force an employer to join an employer organization or whether it also prohibits a strike whose object has the practical effect of forcing all companies in an industry to accept one identical contract even though there is no formal employer organization. Neither the wording of the statute nor the NLRB decisions construing it are particularly helpful in applying it to the factual situation present in the instant case. None of the NLRB decisions reach the instant issue as in each of those cases the Board found that an object of the union's conduct was to force the employer to join an existing employer organization. See Glass Workers Local 1892 (Frank J. Rooney, Inc.), 141 N.L. R.B. 106 (1963); I.L.W.U. Local 8 (General Ore, Inc.,), 126 N.L.R.B. 172 (1960); United Construction Workers (Kanawha Coal Operators Association), 94 N.L.R.B. 1731 (1951). The Act does not define the term "employer organization". However, the parties concede that it is an organization which exists for the purpose of engaging in collective bargaining on behalf of its members. Hence, "forcing or requiring any employer * * * to join any * * * employer organization" could be construed quite broadly to cover both the situation where a union tried to force an employer to join an existing employer organization and the situation where the conduct of the union forced a group of employers to act in the same manner as if they were banded together into a formal employer organization (i. e., a de facto employer organization). Thus, faced with little guidance from past decisions or the plain wording of the statute, the Court must look at the legislative history behind the statute in order to apply it to the facts in the instant case.

The language found in Section 8(b) (4)(A) was not present in either the House or Senate bills underlying the Labor Management Relations Act of 1947 but rather was inserted into the Act by the House-Senate conference committee. There is no clear indication in the legislative history why the language of the present Secton 8(b)(4) (A) was included in the Act. In their memorandum defendants rely heavily on a portion of the Conference Report which states: "Section 8(b)(4) of the conference agreement has been expanded to cover a matter which was covered by Section 12 of the House bill, namely, concerted activity by a union or its agents to compel an employer or self-employed person to become a member." House Conference Report No. 510, 80th Cong., 1st Sess. 44-45 (1947), U.S.Cong. Serv.1947, pp. 1135, 1150. Yet the Court finds that language to be ambiguous at best.³ The reference to Section 12 of the house bill is a more enlightening reference than the use of the phrase "concerted activity by a union or its agents to compel an employer or selfemployed person to become a member." Section 12(a)(3)(A)⁴ of the House bill, when read in conjunction with Sections 2(16)⁵ and 9(f)(1)⁶ of that bill, prohibited all industry-wide bargaining. Additionally, Section 12(b)⁷ of the House bill provided a civil damage remedy to any person injured by such...